Gurney grew up in Palo Alto, California, the youngest of five children of Joanna and Robert Gurney, a mechanical engineer. Encouraged to tinker in the workshop, he built puppets, gliders, masks, and kites, and taught himself to draw by means of books about the illustrators Howard Pyle and Norman Rockwell.

He studied archaeology at the University of California, Berkeley, receiving a BA in Anthropology with Phi Beta Kappa honors in 1979. He then studied illustration at the Art Center College of Design in Pasadena, California. Prompted by a cross-country adventure on freight trains, he and Thomas Kinkade coauthored The Artist’s Guide to Sketching in 1982. Gurney and Kinkade also worked as painters of background scenes for the animated film Fire and Ice, co-produced by Ralph Bakshi and Frank Frazetta.

Gurney's freelance illustration career began in the 1980s, during which time he developed his characteristic realistic renderings of fantastic scenes, painted in oil using methods similar to the academic realists and Golden Age illustrators. He painted more than 70 covers for science fiction and fantasy paperback novels, and he created several stamp designs for the US Postal Service, most notably The World of Dinosaurs in 1996.

Starting in 1983, he began work on over a dozen assignments for National Geographic Magazine, including reconstructions of the ancient Moche, Kushite, and Etruscan civilizations, and the Jason and Ulysses voyages of Tim Severin.

The inspiration that came from researching these archaeological reconstructions led to a series of lost world panoramas, including Waterfall City (1988) and Dinosaur Parade (1989). With the encouragement of retired publishers Ian and Betty Ballantine, he discontinued his freelance work and committed two years’ time to writing and illustrating Dinotopia: A Land Apart from Time, which was published in 1992. The book landed on the New York Times Best Seller List, and won Hugo, World Fantasy, Chesley, Spectrum, and Colorado Children’s Book awards. It has sold over a million copies and has been translated into 18 languages.

Sequels to Dinotopia that are both written and illustrated by Gurney include Dinotopia: The World Beneath (1995), Dinotopia: First Flight (1999), and Dinotopia: Journey to Chandara (2007). Original artwork by Gurney from the Dinotopia books has been exhibited at the National Museum of Natural History of the Smithsonian Institution and the Norman Rockwell Museum, and is currently on tour to museums in the USA and Europe.

Most recently, he has written Imaginative Realism(2009), a book about drawing and painting things that don't exist.